No progress in EU-UK talks, firestorm over UK plan to modify Withdrawal Agreement

This week the EU and the UK held another week-long round in their negotiation of an agreement in regard to their future relationship after the UK’s transition period ends and it leaves the EU’s single market and customs union at midnight on December 31. As after previous rounds, the two chief negotiators, Michel Barnier for the EU and David Frost for the UK, emphasized that little progress had been made in regard to the two most difficult issues standing in the way of an agreement—the EU’s insistence that the UK maintain a “level playing field” in regard to state aid for businesses and labor, health and environmental standards and continue to allow EU fishermen and women to fish in UK waters and agree to some mechanism comparable to the EU’s Common Fisheries Policy to regulate the size of catches and fish stocks in UK waters.

But what was extraordinary about this week’s round, and raised new fears that the EU and UK won’t conclude an agreement prior to the end of October, which both sides agree is the latest possible date in order for an agreement to be in effect by January 1, was a series of statements and actions—most notably, the UK’s publication of its Internal Market Bill—that not only suggested that the UK may be willing to forsake an agreement on the future relationship but indicated it would violate the terms of the Withdrawal Agreement it concluded with the EU last fall. That agreement has the standing of a treaty in international law. If the UK won’t adhere to the terms of the Withdrawal Agreement, why, many in the EU and even some on the Conservative backbenches such as former Prime Minister Theresa May asked, should the EU believe the UK will adhere to whatever terms are negotiated in regard to the future relationship?

On September 2, Barnier delivered an address at the Institute of International and European Affairs in Dublin. In it, he reiterated his view that the UK “has not engaged constructively” with the EU’s conditions for a close future partnership. Specifically, he said the UK “has refused to engage on credible guarantees for open and fair competition.” Any trade and economic partnership “must include robust and credible mechanisms to avoid trade distortions and unfair competitive advantages. This is particularly important in the area of state aid, where the potential to distort competition using subsidies is significant. A Level Playing Field that ensures common high standards—in areas such as labour rights and the environment…is the only way to start a new relationship between the EU and the UK on a firm and sustainable footing.” Secondly, he noted that, since the start of the negotiations,” the UK has not shown any willingness to seek compromises on fisheries. …Contrary to media reports…the UK government’s position has not evolved in past months. No new legal texts have been tabled by UK negotiators. Where the EU has shown openness to possible solutions, the UK has shunned our offers.” Thirdly, he noted that “since the start of these negotiations, the UK has been extremely reluctant to include any meaningful horizontal dispute settlement mechanisms in our future agreement.” In concluding, he noted—presciently, in view of the concerns that arose this week after certain provisions of the Internal Market Bill became known—that the EU’s second important task before the end of the year, in addition to reaching an agreement in regard to the future relationship, is “to ensure the full and effective implementation of the Withdrawal Agreement.”

A few days later, David Frost, who became Lord Frost of Allenton last month, made it clear in an interview with the Mail on Sunday, his first interview since the UK left the EU, that the UK won’t accept the EU’s level playing field rules: “We are not going to be a client state. We are not going to compromise on the fundamentals of having control over our own laws. We are not going to accept level playing field provisions that lock us in to the way the EU do things; we are not going to accept provisions that give them control over our money or the way we can organise things here in the UK and that should not be controversial—that’s what being an independent country is about, that’s what the British people voted for and that’s will happen at the end of the year, come what may.” In regard to the fisheries issue, he said, “At the moment the EU is not engaging in that discussion….The gap is huge and the constructive discussions on this have not started but there are fundamentals we are not going to compromise on and there has got to be a huge difference for our fishermen. We will need to control access to our waters in future and we will.”

And lest there be any doubt whether the UK will leave the single market and customs union at the end of the year if there is no agreement on the future relationship, Frost made it clear; the UK will leave in December “come what may.” “Obviously, lots of preparation was done last year, we are ramping up again and have been for some time….I don’t think that we are scared of this at all. We want to get back the powers to control our borders and that is the most important thing. If we can reach an agreement that regulates trade like Canada’s, great. If we can’t, it will be an Australian-like trading agreement and we are fully ready for that.…What we want, which is the restoration of our own sovereignty and freedom as a country, happens whether the EU likes it or not at the end of the year. They are not used to doing that sort of negotiation. I think they spend too much time trying to guess what our intentions are and not enough time listening to our words.”

On Monday, Prime Minister Boris Johnson issued a statement in which he underscored what Frost had said in his interview. Noting that there needs to be an agreement by the time the European Council meets on October 15 in order for it to be in effect by the end of the year, he said, “If we can’t agree by then, then I do not see that there will be a free trade agreement between us, and we should both accept that and move on. We will then have a trading arrangement with the EU like Australia’s….That would be a good outcome for the UK.…We will have full control over our laws, our rules, and our fishing waters. We will have the freedom to do trade deals with every country in the world. And we will prosper mightily as a result.” He said, “There is still an agreement to be had. We will continue to work hard in September to achieve it. It is one based on our reasonable proposal for a standard free trade agreement like the one the EU has agreed with Canada and so many others. Even at this late stage, if the EU are ready to rethink their current positions and agree this I will be delighted. But we cannot and will not compromise on the fundamentals of what it means to be an independent country to get it.”

The strong words from both chief negotiators and Johnson signaled that this week’s round of negotiation would be difficult and, in all likelihood, would produce, at best, only very limited progress on second-tier issues. But the revelation Monday that the UK’s new Internal Market Bill contains provisions that would violate the Withdrawal Agreement raised an additional, and more profound, problem for the negotiation and, in particular, for the EU: Can it trust the UK to abide by the terms of an agreement on the future relationship, if such an agreement is reached in October?

The bill is designed to ensure there are no new internal barriers to trade and commerce between England, Scotland, Wales and Northern Ireland after the UK leaves the EU’s single market on December 31. But importantly, it also gives ministers powers that could, in effect, amend certain provisions of the Protocol on Ireland and Northern Ireland contained in the Withdrawal Agreement if the UK doesn’t reach an agreement with the EU on its future relationship. Specifically, whereas the Protocol stipulates that EU rules in regard to state aid will apply to the trade in goods in Northern Ireland and the UK must, therefore, notify the EU of any state aid decisions that would affect goods in that market, the new bill would leave it to the business secretary alone to decide whether it is necessary to notify the EU. And whereas the Protocol requires that Northern Irish businesses must fill out export summary declarations when they ship goods to the rest of the UK, that requirement would be waived on the grounds that such goods are not exports. Similar modifications are anticipated in the Finance Bill that implements the budget and will be put forward by the government later this year. Most notably, that bill is expected to limit the number of goods deemed to be “at risk” and subject to checks and tariffs when entering Northern Ireland from the rest of the UK. The UK views these as minor “clarifications;” the EU views them as breaches of international law. Both sides are right.

After those provisions became known, on Tuesday, Brandon Lewis, the Secretary of State for Northern Ireland, was asked in the House of Commons whether the proposed Internal Market Bill “does or potentially might breach international obligations or international legal arrangements?” Speaking from the dispatch box, he said, “Yes. This does break international law in a very specific and limited way.” The answer understandably set off a firestorm of criticism; former Prime Minister Theresa May spoke for many when she said, “The United Kingdom government signed the withdrawal agreement with the Northern Ireland Protocol. This Parliament voted that withdrawal agreement into UK legislation. The government is now changing the operation of that agreement. How can the government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?”

Needless to say, there are many in the EU asking the same question. On Wednesday, the European Commission concluded in an internal analysis that the provisions in the UK bill constitute a “clear breach” of the Withdrawal Agreement. Commission President Ursula von der Leyen tweeted, “Very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement. This would break international law and undermines trust.” Her chief spokesman announced that Vice President Maroš Šefčovič, co-chair  of the EU-UK Joint Committee that is responsible for overseeing the implementation of the Withdrawal Agreement, had called for an extraordinary meeting in London yesterday of the Joint Committee – meaning between himself and Michael Gove, the Chancellor of the Duchy of Lancaster, Cabinet Office Minister and Joint Committee co-chair – at which he would ask the UK government to elaborate on its intentions and respond to the EU’s serious concerns.

Also on Wednesday, Irish Taoiseach (head of government) Micheál Martin spoke by phone with Johnson and conveyed his “very strong concerns” about the proposed modification of the provisions in the Withdrawal Agreement. He said the bill in its proposed form “essentially nullifies and undermines what is an international treaty.” He later told reporters, “I think the British government needs to move to restore trust and to give meaningful reassurance to the European negotiators. Our colleagues in Europe, in particular those conducting the negotiations, are now wondering whether the will is there or not to arrive at a conclusion and get an agreement—and that is a very serious issue….In my view, the sensible thing would be to withdraw those clauses, but it’s a matter for the British government now to decide how it is going to engage with the EU negotiators in how it seeks to restore trust and credibility to the process.”

Following yesterday’s meeting between Šefčovič and Gove, the Commission issued a statement in which it said Šefčovič had “stated, in no uncertain terms, that the timely and full implementation of the Withdrawal Agreement, including the Protocol on Ireland/Northern Ireland—which Prime Minister Boris Johnson and his government agreed to, and which the UK Houses of Parliament ratified, less than a year ago—is a legal obligation. The European Union expects the letter and spirit of this Agreement to be fully respected. Violating the terms of the Withdrawal Agreement would break international law, undermine trust and put at risk the ongoing future relationship negotiations.” The statement said he made it clear that the Agreement, which entered into force on February 1, has legal effect under international law, and after that date neither the EU nor the UK can unilaterally change, clarify, amend, interpret, disregard of disapply it, and “if the Bill were to be adopted, it would constitute an extremely serious violation of the Withdrawal Agreement and of international law.” He also noted the Withdrawal Agreement provides mechanisms and remedies for violations. He called upon the UK to withdraw the measures from the Bill “in the shortest time possible and in any case by the end of the month” and stated that, by putting the Bill forward, the UK “has seriously damaged trust between the EU and the UK.” Gove later said he told Šefčovič the UK would not change the bill.

Almost overlooked in all the drama over the disputed provisions in the UK’s Internal Market Bill, the eighth round of the EU-UK negotiation took place in London this week. As expected, little progress was made. On Thursday, after the round concluded, Barnier reiterated the point he made in his Dublin speech last week: While the EU remains committed to an ambitious future relationship with the UK and, toward that end, has tried to work around the UK’s red lines, “on its side, the UK has not engaged in a reciprocal way on fundamental EU principles and interests.” The UK, he said, continues to reject “indispensable guarantees of fair competition…and important guarantees on non-regression from social, environmental, labour and climate standards. And it has not engaged on other major issues, such as credible horizontal dispute settlement mechanisms, essential safeguards for judicial cooperation and law enforcement, fisheries, or level playing field requirements in the areas of transport and energy.” In concluding his relatively brief statement, Barnier said he and Frost and their teams will remain in contact over the coming days. But, he added, pointedly, “at the same time, the EU is intensifying its preparedness work to be ready for all scenarios on 1 January 2021.”

Lord Frost also issued a relatively brief statement after this week’s round. He said all of the issues, including the most difficult ones, were covered in some detail and there were “useful exchanges. However, a number of challenging areas remain and the divergences on some are still significant.”  He said, “We have been consistently clear from the start of this process about the basis on which agreement is possible between us. Those fundamentals remain…We have consistently made proposals which provide for open and fair competition, on the basis of high standards, in a way which is appropriate to a modern free trade agreement between sovereign and autonomous equals.” He said, “We remain committed to working hard to reach agreement by the middle of October, as the Prime Minister set out earlier this week” and said the chief negotiators will meet again, as planned, next week in Brussels.

David R. Cameron is a professor of political science and director of the European Union Studies Program at the MacMillan Center.